BIR Ruling [UN-017-95]

January 6, 1995 BIR RULING [UN-017-95] Progenerix, Inc. Suite 201, 2/F SRC Bldg. 228 Ortigas Avenue, Greenhills San Juan, Metro Manila Attention: Mr . Benjamin P . De Guzman President Gentlemen : This refers to you letter dated September 13, 1994 requesting for a ruling exempting you from the payment of the expanded withholding tax imposed under Revenue Regulations No. 12-94 on the ground that you have suffered net operating losses for the immediately preceding two (2) tax years. It is represented that your company is a trade/distributor of pharmaceutical products, which sells to companies which may be among the top 5,000 corporations; and that you suffered net operating losses for the immediately preceding two (2) years as shown in your audited financial statements for the years 1992 and 1993 particularly in your Statement of Income and Expenses which indicate that you have incurred losses in the respective amount of P1,603,169.33 and P1,633,997.23 for the years 1992 and 1993. In reply, please be informed that under Section 4(d) of Revenue Regulations no. 6-85, as amended by Revenue Regulations No. 12-94 implementing Section 50(b) of the Tax Code, as amended, the withholding tax prescribed in these regulations shall not apply to income payments of a payee who suffered net operating losses during the immediately preceding two (2) years. Such being the case, and since you have suffered net operating losses for two (2) consecutive years from 1992 to 1993, this Office is of the opinion as it hereby holds that you are exempt from the payment of the creditable withholding tax prescribed under Revenue Regulations No. 12-94 for the years 1994. (BIR Ruling No. 126-94 dated August 15, 1994) This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation the facts turned out to be different, then this ruling shall be considered null and void. Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service)